Monday, September 26, 2011

Eve of Destruction

I once had a law professor friend who would come to my office about three times a week to rant about how things couldn't go on this way much longer (this was nearly 20 years ago). His argument was that law schools were intellectually dead places where mediocre people wasted time analyzing sub-mediocre texts, while sending unprepared graduates off into an increasingly grim and depressing world of legal practice. The situation was so bad, he thought, that the "whole thing" had to collapse eventually. He was a genuinely clever fellow and fancied himself a bit of an intellectual revolutionary in the Gallic style, but he was also very naive. The notion that a social practice that doesn't make any sense on its own terms can't go on more or less indefinitely is rather firmly refuted by history after all. (He has since, like almost all angry young men who turn into not so angry middle-aged men, become Respectable).

Anyway, despite his over-confidence about how we had to be living on the eve of destruction, the question his critique of law schools and the legal profession -- which while somewhat overstated was nevertheless largely accurate -- raised ("how long can things go on like this?") was and is a good one.

I certainly don't claim to know the answer, but let's look at a few basic numbers.

First, on the supply side: Those of us in the business of cranking out people with law degrees can sometime forget that far more people take the LSAT every year than there are spots in ABA-accredited law schools. In the last academic year the ratio, even taking into account repeat takers, was in the neighborhood of 3 to 1. (Note that on a per capita basis Peak LSAT seems to have been achieved 20 years ago: the U.S. population was 20% larger in 2010 than in 1990. And although I wasn't paying any attention at the time I imagine there must have been quite a flurry of panic among law school administrator types in the late 1990s, when test taking per capita was off nearly 50% from its high at the beginning of the decade).

These numbers suggest we're still nowhere close to seeing anything like a shortage of people willing to fork out their own or their parents' money, or far more commonly, borrow ever-increasing sums of taxpayer dollars, to go to law school. Subject to rare exceptions, you can't get into even a third tier school if you score in the bottom half of the LSAT, which of course means there are a lot of rich and/or reckless kids who would like to go to law school who still can't. In other words, as long as the federal loan structure remains the same, law schools can probably continue jacking up tuition and cranking out more and more graduates who will never make an adequate living practicing law.

Increased transparency about all this is important as a moral and practical matter, mainly because it costs almost nothing to implement and it will save some people from making life-wrecking mistakes, but the idea that law school transparency will by itself solve the basic supply and demand problem is almost surely wrong. Consider this post from an LSAT prep site, which actually highlights both the scam blog movement and the bimodal distribution salary data for the potential benefit of its victims customers:

If you’re considering law school, the first thing to do is attempt to calculate the ratio of probable debt to probable earnings. According to Forbes, the average law graduate is $100,000 in debt. To translate this into real terms, 100,000 of debt with 6% interest necessitates $1,400 a month in income just to service the $850 a month it will cost you to pay off the loan in fifteen years. And that’s before you’ve laid out a cent on food, a mortgage, a car payment, or the new waffle weave Henley from L.L. Bean.

Sounds very level-headed and sensible doesn't it? What the heck is something like this doing on an LSAT prep site you might wonder? Read on:

Of course, it’s difficult to foretell what your earning potential is likely to be, given the disparity in payment levels even among students from the same school. For instance, I know of two graduates from Southwestern Law School. Both were on law review, but one was employed by an AM-Law top 50 firm upon graduation while the other was hired by a less prestigious firm. The former started at about $160k annually, whereas the other started at about $80k. Ironically, their law firms are in adjacent buildings with the more prestigious firm on the higher floor. The latter literally spends her days looking up at her former classmate.

I don't want to be too hard on the people running this site, because after all in just this one post they're providing potential law students with a lot more candid information than can be found in the entire ABA Guide, but consider how potential law students will read this paragraph. My guess is that they'll think that there are two likely scenarios if you do well (which of course they all believe they will) at a third-tier law school. The good scenario is getting a starting salary of $160K a year, which will of course grow over the years. The bad scenario is a starting salary of $80K, which the authors of web site try to warn them isn't so great if you have $100K in debt, but even so is pretty manageable, especially as your salary grows and your debt declines over time.

How much consciousness-raising must be done to dispel this kind of nonsense? Obviously a whole lot. In the short term, the only kind of reality therapy that would probably make a difference to most potential law students is cutting off the federal loan money and making sure that private loans going forward remain dischargeable in bankruptcy (The worst possible change that could be made to the system would be to greatly cut back on federal direct lending while making the private law school loans that would take the place of federal lending non-dischargeable. There's a good chance something like that will be what happens when current federal educational lending practices become a public scandal).

The bottom line is that we're only at the very beginning of a reform process that continues to face immense structural barriers at every turn. Again, law school transparency is very much just a first step. But as the proverb has it that's what a long journey must begin with.

59 comments:

What we really need for 0Ls to understand what legal work is actually like. You do not become a Leader of Society, your friends and family do not look at you with awe. But for a few exceptions, you basically spend you day doing routine paperwork.

It's the fetishization of being a lawyer, and "thinking like a lawyer," that really needs to change. We could cut the number of law students in half, but that wouldn't solve the problem if those people are still the types that ought not to be in law school in the first place.

Wasn't it Adam Smith who said that there's "a lot of ruin in a nation"?

Basically, the government are the only people who are likely at any point to be motivated to stop this. The government will only be motivated if the true situation becomes known to the public. This is why transparency is important.

@BL1Y - Deregulation of the legal services industry is the best way to acheive this. Really, many lawyers go into large amounts of debt to end up doing things that it would not have taken them three years to learn, and which anyway they did not learn how to do in law school.

This work could just as easily be done by legal consultants, qualified legal executives, notaries (similar to those in civil law countries) etc.

I don't know if a full deregulation of legal services is called for, but there certainly is some room for it. Why a licensed realtor needs a lawyer to close a sale is beyond me.

Letting more lay people perform legal or quasi-legal services will further squeeze the legal market, but I'm not in favor of lawyer protectionism. I'd happily see the legal market shrink if what was left weren't lawyers but Lawyers.

@BL1Y My dad is a licensed realtor, I have practiced with him, and we have never needed a lawyer to close a sale. To be honest, a licensed realtor does fairly similar work to a transactional attorney (apply boilerplate documents to lots of transactions, review documents for stupid errors that shouldn't, but do, matter).

@BL1Y - I think there is no problem with people being paid relatively modest salaries (25-35,000 US$) to take care of pro-forma transactions such as conveyancing where they have not been saddled with debt in gaining the qualifications to do so. The problem is with licensed attorneys labouring to pay back huge loans on meagre salaries for work which they are de facto un-qualified but de jure over-qualified.

In the UK the recently legal services reform will allow non-lawyers to own firms offering conveyancing services. This seems an entirely positive step in my view, so long as the regulations requiring such firms to remain properly ensured are kept in place.

"If you do well you'll make $160k but if not you'll have to settle for $80k" is a classic law school fraud technique. I almost wonder if there is some school somewhere where the Deans and other conspirators are taught the technique.

The truth about Southwestern is that more than half of the graduating class do not get full time jobs in law.

Using the ABA's "everyone who works one hour per week is employed" standard, Southwestern can claim that 95% of their graduates had jobs. But only 22.9% of their graduates reported a salary because that's the percentage who got *real* jobs. I REPEAT, AT SOUTHWESTERN ONLY 22.9% OF GRADUATES REPORTED SALARY INFORMATION. http://www.lawschooltransparency.com/clearinghouse/?school=southwestern

Fraud is a crime, but when we live in a corrupt world where prosecutors don't do their job, everyone feels free to profit from crime. Blueprint press doesn't want you to know how bad the employment situation is, because if you knew you wouldn't pay them money for LSAT prep. So when Blueprint advertises in hopes of getting your money, they mimic the schools' fraud techniques. Hey, everyone else is doing it so why shouldn't Blueprint do it?

As someone who has been in the test prep business for over a decade, I've increasingly been having problems with the LSAT portion of the business. While I certainly earn my keep when I help a kid who starts at a 157 work his way up to a 170, thereby getting him into a school that actually has a chance of getting him a good job (or of getting him a free ride at a decent school), I wonder if the "right" thing to do with a client who starts at a 140 and works and WORKS just to get to a 153 would be to tell them, "You really *really* should not go to law school."

For the past two years (ironically since I've started law school), I've switched over to doing 95% MCAT work, since the students are more well-informed, the test is substantive and interesting, and I don't have any ethical worries about helping kids in a life-ruining process.

That's ridiculous BL1Y. What you are doing is taking one attorney's job and trying to say that it represents all attorney jobs. That is as fraudulent as Blueprint saying that the 80k and 160k students represent Southwestern graduates.

Right now a prosecutor has the power to file a lawsuit bringing criminal conspiracy to commit fraud charges against the schools. That's a damn important, exciting, praiseworthy and dramatic job. Lots of other examples as well.

Then you must have learned nothing in 1L property, you must have zero knowledge of the practicalities of real estate deals and you must have no clue what reps/warranties the mortgage securitization agreements require.

@9:25: Prosecutors would fall into the "but for a few exceptions" category. The vast majority of lawyers are not prosecutors. Heck, the vast majority of trial lawyers spend their days with routine motions and filings, not exciting arguments before a jury.

@9:32: Other than knowing the difference between race and notice jurisdictions, real estate transactions aren't tested on the bar exam. It would, however, make a lot of sense to put questions about reps and warrants and mortgage securitization on the realtor licensing exam.

Back in the day, LSAT prep companies used to post tables that showed a "correlation" between LSAT score and average starting salary. Since many schools with high median LSAT scores were top law schools, the table illustrated that on average people with top LSAT scores earned over six figures, while people who scored very poorly on the LSAT earned much less. It appears as though the test prep companies have stopped making these claims. I don't know if anybody remembers seeing these tables, but I just thought I'd point it out.

9:32: I spent my entire 1L property class learning about the Coase Theorem and tragedy of the commons, what the law on hunting foxes was, the RAP and future interests, my professor's theories on utilitarian property uses, and who gets the money from a ring if the chimney sweep finds it in someone's house but brings it to his boss who then takes it to the pawnshop.

Don't feel bad 11:40. I spent my entire 1L property class learning about who owned the Barry Bond's homerun baseball sprinkled in with a healthy dose of the Coase Theorem. We also spent quite a bit of time (several weeks) discussing the implications of divvying up Native American land in a trust and "reading between the lines" of Justice O'Connor's opinion in that case. It was a complete waste of time and most people stopped showing up to class.

A naive question, that I think may have been answered here before but I can't find the post: Does the government hold onto student debt or does it sell that debt to banks and other financial institutions? If the latter (which I strongly suspect), the interest rates undoubtedly are set high enough to cover defaults. And law students--especially before 2008--were a pretty attractive set of debtors. Even the ones who didn't get the high paying jobs were achievement-minded, responsible sorts who would try hard to repay their loans. And the necessity of professional licensing was a back up to that: lawyers can be disciplined, disbarred, or rejected based on their failure to pay debts.

It also occurs to me that financial institutions might have been smart enough to foresee what happened to law school tuition: If you pump money into the system, tuition will rise--allowing you to make still more loans and collect more interest. The financial institutions make their markets rather than simply respond to it. Some posts have assumed banks (or the government) lose money when a full loan isn't repaid, but I doubt that's true. (Although there definitely is a possibility for collapse, as in the housing market, if projections are overly rosy.)

These questions aren't meant to excuse law schools and professors from their actions; all of us are moral actors in this system (although I don't agree with every fault ascribed to legal education by commentators). I'm asking these questions because I'm trying to get as much info as possible about how the whole system works. Reasons for collecting that info--coming soon in another post. I'm trying to learn the virtues of brevity!

"...how things couldn't go on this way much longer (this was nearly 20 years ago)."

Yep....and things will just continue on like this. Nobody does anything because....OF....THE.....MONEY....and the entrenched interests involved. This is such a 'no duh' comment and yet we are concentrating on a symptom of the whole disease, transparency. Stupid is as stupid does. (make that a headline for one of your posts, Campos. Or is that not retro enough for you? Too bad Tom Hanks said it and not a semi-obscure rock group).

"He was a genuinely clever fellow and fancied himself a bit of an intellectual revolutionary in the Gallic style" LOLWUT? This may be my line of yours out of all these posts. It contains so much info about who you are and who you want to be. Please tell me that you don't go around talking like this...? (and yes, I'm being an asshole).

1:36: Most professors don't--that's exactly why I want to collect the information. The business of education has changed dramatically during the decades I've been a professor, and most of us have been left behind. Contrary to what many people assert here, I don't think we've been doing useless stuff with our time. Last week, one of my faculty colleagues was named one of the 100 most influential individuals in corporate boardrooms (partly because of his "Deal Professor" column in the NY Times); another succeeded in having the statewide board of education adopt the diversity policy recommendations he and his institute developed--those recommendations will govern elementary and secondary schools throughout the state. Very different scholarship/work, but huge practical impact--and representative of what I see my colleagues doing.

I think it's a mistake to believe that professors like this are uninterested in learning about the finances of legal education and the legal job market. Sure, some of them will be busy with their own personal lives or professional pursuits, and won't make time for this--but no issue needs everyone's attention.

That's why I'm seeking information. I'd like to put together a presentation for colleagues. I'd also like to consider writing a simple, somewhat hip booklet for prospective law students. Any professor--or group of professors--could make such a thing available, independent of any law school.

You should have known about this years ago....if I used the same excuses when trying to explain the concept of mens rea (for instance) my Crim Law prof would have torn me apart. Your lack of knowledge says all we need to know about legal academics.

Also, thanks for listing all those credentials. Am I supposed to be impressed?

Deborah- Did you ever consider asking your students? Having a conversation with them about their lives? Asking about what kind of debt they might already have from undergrad and what kind of debt they're incurring during law school? Surely some of your students know someone- maybe even themselves- who have defaulted on a loan, been hounded by collection agencies, been unable to participate in the middle class by doing things like getting a car loan or a mortgage? All the information you need is most likely sitting right in front of you, in class. Choosing to ignore it is your choice- a convenient, intellectually lazy choice.

The last part of this sentence is almost definitely wrong: "Increased transparency about all this is important as a moral and practical matter, mainly because it costs almost nothing to implement." If you don't want to rely on self-reported data, then someone has to collect and analyze the data (and presumably there have to be some oversight to ensure that this is all done accurately). If law schools are to still rely on the self-reported data of graduates, there is the danger that students will still be receiving an overly rosy picture of their employment prospects but, in any event, someone will still have to aggregate and sort that data. I tend to think these expenses are worth incurring but I don't think it's fair to suggest that improved transparency is cost free particularly where increased costs might lead to even higher tuition.

Second, your critique of the LSAT prep site is off base because the site notes that both students were on the Southwestern Law Review. Even someone who knows little about law school would know that not every student can be on law review. Consequently, $80,000 a year is hardly presented by the site as a worst case scenario.

@2.32 - But shouldn't it present the worst case scenario as the most likely outcome, since that is what it is? Comparing two relatively unlikely outcomes and presenting them in a away which makes the uninitiated think they are easily achievable is not telling it like it is.

If law schools or agencies don't rely on self-reports, how are they going to get information? Is the idea to have law schools conduct investigations of former students? Finding where they work might be one thing, but salary info? Doesn't this have to come from graduates?

BL1Y: His recognition was for his writing (both academic and weekly in the Times) -- *not* for being a board member. The group giving the awards divided the recipients into board members and nonboard members; my colleague is in the latter group. There are a lot of glib comments about the worthlessness of academic work, but I don't think the facts support those extreme statements--either for my colleague or many other professors.

2:21: Yes, I have talked to my students, both informally and in a class I organized partly for this purpose. One of my students in the Business of Law seminar I taught last year wrote an excellent paper on the finances of legal education from a student's perspective. The full class discussed her paper, as well as a range of other student papers on the economics of law.

I'm actually not as ignorant or naive about these issues as some commentators want to assume--I just believe in collecting as much information as possible. And just as my students often email me for answers on evidence questions they encounter at work, rather than doing the research themselves, I think it makes sense to ask others for leads. When I respond to my students' requests, I don't usually snarl at them while giving the info: In most cases, I could easily snap back, "just google it--it's called research!" But I appreciate the leads nonetheless, "Terry Malloy."

Deborah: Davidoff still wasn't recognized for his work qua professor. He was influential specifically because he left the academic arena to write. Had he written for law reviews instead of the NYT no one would care.

Professor Merritt's line that she wants to collect the data is bullshit. It's a mere delay tactic. It's a procedural defense. The data could be collected in a few days if her school wanted to collect it. But the truth is that they don't want to collect it, see: http://abovethelaw.com/2011/09/quote-of-the-day-law-school-opacity/

Once again this unsympathetic bunch lash out at someone who's actually trying to help the cause. Are professors clueless bystanders who could make good by getting involved on your side, or are they evil and unredeemable such that you have exactly zero potential allies inside the law schools? I've heard both views, but we can't have it both ways. If you choose the former, treat Deborah's questions as what they are -- sincere attempts to understand these complaints and help. That seems like a kind of response you'd want. And if you take the other view, why in the hell are you commenting on a law professor's blog? Moan at ATL or one of the toilet sites if you really feel that no professors (except of course Saint Campos) can possibly be persuaded by your position.

You're not doing the cause any favors by being a mob of insufferable pricks and acting like nobody is "pure" enough to help you. That's just stupid, stupid, stupid.

I have a strong hunch that whatever the level of disclosure the law schools will still be able to fill their enrollments and more. As an example, for atleast two generations architecture schools have been where law schools are today. Only a small portion of their graduates are ever employed as architects. And not just the lower tier schools. A couple of years ago one of the literary magazines (Harpers? Atlantic?)did a story by Harvard graduate going to his classes 25th reunion. Barely a third of his glass were still employed in the field. Yet architecture schools across the country are growning with applicants. Of Ph.D programs I won't even speak. Same fate for us? William Ockham

BL1Y, I expected something like the basic capacity to distinguish allies from adversaries. Everyone must have missed the part where she's been talking to students, including in class, about these issues. It's bizarre to hear a group whose goal is "raising awareness" refuse to do exactly that just because the questions come from a law professor. Malloy and the rest can shit on people who actually want to engage with you (and who would, considering the treatment they now can expect?), but you'll end up with no sympathizers, no coalition, no voices from the inside joining yours. That will probably delay progress -- and even if others work to address these issues, it won't be because you persuaded them. You'll have nothing to show for all this but an echo chamber for repetitive rage that everyone else has stopped listening to. But if the goal is to marginalize yourselves enough to be non-factors in whatever constructive change does happen, then bravo.

Maybe I'm reading her tone wrong, but to me it just sounded a bit empty and insincere.

She wants to write a "somewhat hip booklet for prospective students."

You don't need to have a 'burn down the house' attitude, but she comes across to me as just viewing the crisis as another opportunity for professorial play time.

I agree that the movement needs to not marginalize itself by destroying any chance of a coalition, but these aren't new issues. They've been building for decades. So far, all the professoriate has done is talk. At what point can people start saying 'nut up or shut up?'

@9:04: Waiting out the opposition is definitely a viable tactic for law schools. No one makes a living criticizing law schools, they eventually have to get on with their lives. Law schools have tons of money coming in and can just wait out their critics. Put in a plan to 'look into things' over 3-5 years, and by the end you can pretend it never happened, no one who cared will be around anymore to remember what you were supposed to be doing.

But, I don't think that sort of calculated plotting is going on. I think the legal academy has benefited from critics moving on, but not in a creepy conspiratorial way.

Instead, I think it's just that this is how professors deal with things. They talk, write an article, and poof! Problem dealt with! They simply don't live in a world of actions. I think they honestly believe that a law review article or a seminar discussion about the topic is a real step.

William Ockham said.... 9:04(second) I hope you're right. And it's a good point that laws students are risk aversive and thus available to the facts revealed by open disclosure. But here is how I see it structured. The schools at the law school pinnacle place almost all their graduates so they lose almost no students to disclosure. Those they do can be instantly replaced by students who would otherwise go to T-14 schools. And so on. At least through T-30 there's not going to be much attrition. And what there is can be quickly scavenged from further down the top tier. Remember by skimming off the top of the class at even the lowest Tier 1 schools your getting people with 164 and up LSATs. So it's not like you're compromising the quality of your class by much. Also remember that not much more than a decade ago a 160 LSAT would get you into all but the 10 or 12 highest rated law schools in the country. In Tier 2 the same system keeps working itself down the hierarchy. Temple Law fills the bottom quarter of it's class out of the top half of Seton Hall. Seton Hall takes Villanova's best and brightest. But in Tier 2 no one's taking students with less than 155 LSATs. This game of musical chairs works it's way through Tier 3 and Tier 4. Schools with 152 LSAT cutoffs reduce it to 150. The 150's dip to 147 and so on. Even down at the bottom of Tier 4,Thomas Jefferso Law School of class action fame, has a 25th percentile of 149. Also not to forget a 150 LSAT converts to a 120 IQ. Well over a standard deviation above average. But here's the really depressing numbers. 50,000 people started law school in 2011. Something over 150,000 took the LSAT in 2010-2011. So that if half of the 50,000 people decided not to go to law school, with over 100,000 left over people who had taken the LSAT the law schools would only have to convince 1 out of 4 to go to law school and the would be full, back up to their 50,000 quota. I'm hoping you're right, but please help me figure out how I'm wrong.

12:32, I think you're underestimating the sheer degree of fraud in these numbers. I think the true job placement for a tier 2/3/4 school is that 25-35% of the graduates get full time jobs as attorneys. It's night and day different from the "top students make $160k, mediocre ones make $80k" lie that you see perpetuated by the schools. If the true numbers came out, the number of people taking the LSAT would plummet and I think total enrollment would fall by 25-50%. One group - wealthy kids with low LSATs - would see their enrollment go up but every other group would run like hell.

If the truth came out, you would see this mass exodus that would devastate legal academia. That's why the schools are fighting to hard to keep the fraud going (for example, see the ABA committee decision of this morning, to no longer distinguish between part time vs. full time or mcdonalds employee vs. lawyer employment when collecting statistics).

Yep, here in Australia, virtually no universities publish stats of employment etc, but still the lemmings flock to it. Essentially, there are far too many liberal arts losers with big egos who can't do maths and can't or wont work with their hands (myself included). Law school is a magnet for such people.

12:49, there is just *no* way that "if the truth came out, you would see this mass exodus tha twould devastate legal academia." Those who are post here to try and punish or destroy law professors, this is pure fantasy and wishful thinking. If your goal is to "devastate legal academia," find another cause, because transparency won't do that. 2:00 is right -- increased disclosure might have an initial year or two's chilling effect on enrollment, but it wouldn't drop by more than 15%, and then it would pick right back up and continue to build. What makes you think that 50% of people who currently take the LSAT are reasonable enough to realize they might not be at the top of the class? Even with full transparency, people's natural optimism will drive them to boundedly rational decisions and, so, to law school in droves. Transparency will do nothing in the medium term except legitimize the system so that there are no threats to its continuation in the long term.

No, I'm not exactly sold on the idea that transparency will have no effect. It will have an effect on those who are grown up enough to see law school as mainly a financial transaction - that is, those who are actually adult enough for someone to pay them to give them legal advice.

Sure, plenty of people sign up for law school without having quite this kind of grown-up attitude, and this kind of info won't have a great deal of impact on them. But at least they won't be able to say that they weren't warned.

Transparency can do more than just affect the total number of applicants.

We also have to look at who those applicants are. The people who are going to be most easily dissuaded are the ones who don't really want to be lawyers in the first place. Replacing them with people who will be happy as a lawyer would be a huge improvement.